PARIS—Behind Tuesday's loosening of a 40-year-old pact that tied together Nestlé SA and L'Oréal SA are large trunks of cash looking to be put to use.

In the first step of a long-anticipated corporate decoupling, French cosmetics company L'Oréal said it would buy 8% of its own shares held by Switzerland's Nestlé, paying cash for more than half of the stake, which is valued at €6.5 billion ($8.87 billion). L'Oréal said it would cancel...